IAC to Spin Off Vimeo

Shares of IAC rose more than 14% to $184.22 in morning trading.

Vimeo’s subscriber base and revenue have grown this year as businesses have boosted efforts to build their web presence during the pandemic. In every month from April through November, Vimeo’s revenue was at least 40% higher compared with the same month of 2019. Its third-quarter revenue was $75.1 million. At the end of September, Vimeo had 1.46 million subscribers, up 21% from a year earlier.

The business recorded a third-quarter operating loss of $3.3 million, compared with an $11.2 million operating loss in the year-ago period.

Founded in 2004, Vimeo is rooted in hosting videos. Like Alphabet Inc.’s YouTube, it allows people and businesses to upload digital clips for streaming and sharing. But diverging from YouTube, Vimeo has steered away from an advertising-based model, instead focusing on selling subscriptions for a suite of video-creation and editing tools pitched at helping businesses and other content creators build an online presence.

Vimeo would become the 11th company to be spun off from IAC and its predecessors, IAC said. Two years ago, IAC agreed to fully separate from Match Group Inc., which runs dating services. Expedia Group Inc., a travel-booking provider, was spun off from IAC in 2005.

IAC last month said it was exploring a spinoff of Vimeo and announced the platform had raised $150 million in equity from technology-investment firm Thrive Capital and Singapore sovereign-wealth fund GIC. The fundraising round valued the business at $2.75 billion.